Contract dispute halts health care service to 750,000 customers

On behalf of Peter C. Bronstein of The Law Office of Peter C. Bronstein posted in Contract Disputes on Friday, October 28, 2016.

When a hospital network and a major insurer of patients get into a contract dispute, it usually results in significant hardship to the patients who want to use health care facilities that are in the network. This type of contract dispute occurs periodically in California and other states. It is presently taking place in another state between Tenet Healthcare and Humana.

Tenet owns a network of hospitals and Humana insures about 750,000 customers in that state. The parties have a contract that is expiring and must be re-negotiated. However, they cannot agree on new terms for going forward. Tenet contends that Humana has obstructed negotiations and is placing its self-interest over the needs of its members. In fact, the large number of customers insured by Humana have been unable to get the benefits of their insurance coverage with respect to Tenet facilities and physicians since Oct. 1.

Humana counters that it has a responsibility to assure that its contracted facilities provide quality and cost-effective care. What that means has not been revealed in public and remains for now a matter for ongoing negotiations between the hospital network and the insurer. Meanwhile, Humana’s 750,000 customers are no longer able to use Tenet’s hospitals.

Emergency services are apparently still available in some cases. The customers will have to pay higher out-of-pocket bills in order to use the Tenet hospitals, doctors, urgent care facilities and other services. The contract dispute affects those with Medicare, Medicaid, employment group plans and other customers. Given the importance of health care facilities and physicians to the welfare of the public, it is imperative that the parties negotiate in good faith and that both sides keep in mind their responsibilities to their health care patients. Although this dispute does not reach California customers, similar contract negotiations have negatively impacted California citizens in the past.

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